Author: GlobeNewswire

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THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

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Full Year 2024 Financial Highlights⁽¹⁾:

• Revenues of $2.7 billion
• Gross Margin at 16%
• Adjusted EBITDA⁽²⁾⁽³⁾ amounted to $195.5 million
• Net Earnings amounted to $54.2 million
• Total dividends of $0.56 per share declared⁽⁴⁾

Q4 2024 Financial Highlights⁽¹⁾:

• Revenues of $707.8 million
• Gross Margin at 16%
• Adjusted EBITDA⁽²⁾⁽³⁾ amounted to $51.9 million
• Net Earnings amounted to $8.3 million
• Quarterly dividend of $0.14 per share declared⁽⁴⁾

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VANCOUVER, British Columbia, Feb. 27, 2025 (GLOBE NEWSWIRE) — Doman Building Materials Group Ltd. (“Doman” or “the Company”) (TSX:DBM) announced today its fourth quarter and full year 2024 financial results⁽¹⁾ for the period ended December 31, 2024.

For the year ended December 31, 2024⁽¹⁾, consolidated revenues increased to $2.7 billion, compared to $2.5 billion in 2023, largely due to the impact of the results of the 2024 acquisitions, which were also offset with the slowing in the construction materials market. The Company’s sales by product group in the period were made up of 76% construction materials, with the remaining balance resulting from specialty and allied products of 20%, and other of 4%.

Gross margin dollars were $424.8 million in 2024, versus $402.7 million in 2023, benefiting from the results of the Company’s recent acquisitions. Gross margin percentage was 16.0% during the year, compared to the 16.2% achieved in 2023, reflecting year-over-year decreases in certain construction materials categories within the Company’s legacy operations.

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EBITDA⁽³⁾ and Adjusted EBITDA⁽²⁾ amounted to $192.2 million and $195.5 million, respectively, compared to EBITDA of $196.1 million in 2023. Adjusted EBITDA in 2024 excluded $3.3 million in non-recurring acquisition related costs. Net earnings for the full year ended December 31, 2024, were $54.2 million versus $75.8 million in the comparative period of 2023. Net earnings for the year were impacted by the previously discussed non-recurring acquisition-related costs. Adjusted net earnings before these non-recurring costs were $56.6 million.

The Company declared a total of $0.56 per share⁽⁴⁾ in dividends in 2024, which was unchanged compared to 2023.

For the three-month period ended December 31, 2024⁽¹⁾, revenues amounted to $707.8 million, compared to $527.4 million in the same period in 2023. The Company’s sales by product group in the quarter were made up of 79% construction materials, with the remaining balance of sales resulting from specialty and allied products of 17%, and forestry and other of 4%.

Gross margin dollars were $113.3 million in the three-month period versus $80.6 million in the comparative quarter of 2023. Gross margin percentage was 16.0% in the quarter, an increase from 15.3% achieved in the same quarter of 2023.

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EBITDA⁽³⁾ and Adjusted EBITDA⁽²⁾ for the fourth quarter amounted to $51.0 million and $51.9 million, respectively, compared to EBITDA of $33.2 million during the same period in 2023. Adjusted EBITDA in the fourth quarter of 2024 excluded $1.0 million in non-recurring acquisition related costs. Net earnings for the three-month period ended December 31, 2024, were $8.3 million versus $10.5 million in the comparative period of 2023. Net earnings for the quarter were impacted by the previously discussed non-recurring directly attributable acquisition related costs. Adjusted net earnings before these non-recurring costs were $9.0 million.

The Company declared a $0.14 per share⁽⁴⁾ dividend, which was paid on January 15, 2025, to shareholders of record at the close of business on December 31, 2024.

“We successfully navigated through 2024 by maintaining our focus on operational excellence through inventory and overall cost management, all while strengthening our financial position and executing significant and strategic growth opportunities,” commented Amar S. Doman, Chairman of the Board. “We are proud of our accomplishments in 2024 which have resulted in strong financial results in the fourth quarter, which is a seasonally slower period for Doman.”

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Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA:

About Doman Building Materials Group Ltd.

Founded in 1989, Doman is headquartered in Vancouver, British Columbia, and trades on the Toronto Stock Exchange under the symbol DBM.

As Canada’s only fully integrated national distributor in the building materials and related products sector, Doman operates several distinct divisions with multiple treating plants, planing and specialty facilities and distribution centres coast-to-coast in all major cities across Canada and coast-to-coast across the United States.

Strategically located across Canada, Doman Building Materials Canada operates distribution centres coast-to-coast, and Doman Treated Wood Canada operates multiple treating plants near major cities. In the United States: headquartered in Dallas, Texas, Doman Lumber operates 21 treating plants, two specialty planing mills and five specialty sawmills located in nine states, distributing, producing and treating lumber, fencing and building material servicing the central U.S.; Doman Tucker Lumber operates three treating plants, specialty sawmilling operations and a captive trucking fleet serving the U.S. east coast; Doman Building Materials USA and Doman Treated Wood USA serve the U.S. west coast with multiple locations in California and Oregon; and in the state of Hawaii the Honsador Building Products Group services 15 locations across all the islands.  The Company’s Canadian operations also include ownership and management of private timberlands and forest licenses, and agricultural post-peeling and pressure treating through its Doman Timber operations.  

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For additional information on Doman Building Materials Group Ltd., please refer to the Company’s filings on SEDAR+ and the Company’s website www.domanbm.com.

For further information regarding Doman please contact:

Ali Mahdavi
Investor Relations
416-962-3300
ali.mahdavi@domanbm.com

Certain statements in this press release may constitute “forward-looking” statements. When used in this press release, forward-looking statements often but not always, can be identified by the use of forward-looking words such as, including but not limited to, “may”, “will”, “intend”, “should”, “expect”, “believe”, “outlook”, “predict”, “remain”, “anticipate”, “estimate”, “potential”, “continue”, “plan”, “could”, “might”, “project”, “targeting” or the inverse or negative of these terms or other similar terminology. Forward-looking information in the full year 2024 Reporting Documents includes, without limitation, statements regarding funding requirements, dividends, commodity pricing, debt repayment, interest rates, economic conditions data and housing starts. Additionally, the ultimate impact of COVID-19 on the Company’s results is difficult to quantify, as it will depend on, inter alia, the ongoing duration and impact of the pandemic, the impact of government policies, and the pace of economic recovery. These statements are based on management’s current expectations regarding future events and operating performance, and on information currently available to management, speak only as of the date of the full year 2024 Reporting Documents and are subject to risks which are described in the Company’s current Annual Information Form dated March 28, 2024 (“AIF”) and the Company’s public filings on the Canadian Securities Administrators’ website at www.sedarplus.com (“SEDAR”) and as updated from time to time, and would include, but are not limited to, dependence on market economic conditions, risks related to the impact of geopolitical conflicts, local, national, and international health concerns, including but not limited to COVID-19 or other viruses, epidemics or pandemics, sales and margin risk, acquisition and integration risks and operational risks related thereto, competition, information system risks, technology risks, cybersecurity risks, availability of supply of products, interest rate risks, inflation risks, risks associated with the introduction of new product lines, product design risk, product liability risk, modern slavery and supply chain risks, environmental risks, climate change risks, volatility of commodity prices, inventory risks, customer and vendor risks, contract performance risk, availability of credit, credit risks, performance bond risk, currency risks, insurance risks, tax risks, risks of legislative or regulatory changes, international trade and tariff risks, operational and safety risks, resource industry risks, resource extraction risks, risks relating to remote operations, forestry management and silviculture, fire and natural disaster risks, key executive risk and litigation risks. These risks and uncertainties may cause actual results to differ materially from those contained in the statements. Such statements reflect management’s current views and are based on certain assumptions. Some of the key assumptions include, but are not limited to, assumptions regarding the performance of the Canadian and the United States (“US”) economies, the impact of COVID-19, other viruses, epidemics, pandemics or health risks, interest rates, exchange rates, inflation, capital and loan availability, commodity pricing, the Canadian and the US housing and building materials markets; international trade matters; post-acquisition operation of a business; the amount of the Company’s cash flow from operations; tax laws; laws and regulations relating to the protection of the environment, including the impacts of climate change, and natural resources; and the extent of the Company’s future acquisitions and capital spending requirements or planning in respect thereto, including but not limited to the performance of any such business and its operation; availability or more limited availability of access to equity and debt capital markets to fund, at acceptable costs, the Company’s future growth plans, the implementation and success of the integration of acquisitions, the ability of the Company to refinance its debts as they mature; the direct and indirect effect of the US housing market and economy; exchange rate fluctuations between the Canadian and US dollar; retention of key personnel; the Company’s ability to sustain its level of sales and earnings margins; the Company’s ability to grow its business long-term and to manage its growth; the Company’s management information systems upon which it is dependent are not impaired, ransomed or unavailable; the Company’s insurance is sufficient to cover losses that may occur as a result of its operations as well as the general level of economic activity, in Canada and the US, and abroad, discretionary spending and unemployment levels; the effect of general economic conditions; market demand for the Company’s products, and prices for such products; the effect of forestry, land use, environmental and other governmental regulations; and the risk of losses from fires, floods and other natural disasters and unemployment levels. They are, by necessity, only estimates of future developments and actual developments may differ materially from these statements due to a number of known and unknown factors. Investors are cautioned not to place undue reliance on these forward-looking statements. All forward-looking information in the full year 2024 Reporting Documents is qualified by these cautionary statements. Although the forward-looking information contained in the full year 2024 Reporting Documents is based on what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in the full year 2024 Reporting Documents may be considered “financial outlook” for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than the full year 2024 Reporting Documents.

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In addition, there are numerous risks associated with an investment in the Company’s common shares and senior unsecured notes, which are also further described in the “Risks and Uncertainties” section in these full year 2024 Reporting Documents and include but are not limited to the factors and risks described in the periodic and other reports filed by Doman with Canadian securities commissions and available on SEDAR in the “Risk Factors” sections of Doman’s annual information form dated March 28, 2024, as may be updated from time to time. These forward-looking statements speak only as of the date of this press release. We caution that the foregoing factors that may affect future results are not exhaustive. When relying on our forward-looking statements to make decisions with respect to Doman, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

Neither Doman nor any of its associates or directors, officers, partners, affiliates, or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in these communications will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Except as required by applicable securities laws and legal or regulatory obligations, Doman is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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⁽¹⁾ Please refer to our Q4 2024 MD&A and Financial Statements for further information. Our Q4 2024 Financial Statements filings are reported under International Financial Reporting Standards (“IFRS”).

⁽²⁾ In the discussion, reference is made to Adjusted EBITDA, which is EBITDA as defined above, before certain non-recurring or unusual items. This is not a generally accepted earnings measure under IFRS and does not have a standardized meaning under IFRS. The measure as calculated by Doman may not be comparable to similarly-titled measures reported by other companies. Adjusted EBITDA is presented as we believe it is a useful indicator of Doman’s ability to meet debt service and capital expenditure requirements from its regular business before non-recurring items. Adjusted EBITDA should not be considered by an investor as an alternative to net earnings or cash flows as determined in accordance with IFRS. For a reconciliation from Adjusted EBITDA to the most directly comparable measures calculated in accordance with IFRS refer to “Reconciliation of Net Earnings to Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”.

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⁽³⁾ In the discussion, reference is made to EBITDA, which represents earnings from continuing operations before interest, including amortization of deferred financing costs, provision for income taxes, depreciation, and amortization. This is not a generally accepted earnings measure under IFRS and does not have a standardized meaning under IFRS, and therefore the measure as calculated by Doman may not be comparable to similarly titled measures reported by other companies. EBITDA is presented as we believe it is a useful indicator of a company’s ability to meet debt service and capital expenditure requirements and because we interpret trends in EBITDA as an indicator of relative operating performance. EBITDA should not be considered by an investor as an alternative to net earnings or cash flows as determined in accordance with IFRS. For a reconciliation of EBITDA to the most directly comparable measures calculated in accordance with IFRS refer to “Reconciliation of Net Earnings to Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and Adjusted EBITDA”.

⁽⁴⁾ On December 13, 2024, Doman declared a quarterly dividend of $0.14 per share, which was paid on January 15, 2025, to shareholders of record on December 31, 2024. Please refer to our Q4 2024 MD&A and Financial Statements for more information.

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CALGARY, Alberta, Feb. 26, 2025 (GLOBE NEWSWIRE) — DIRTT Environmental Solutions Ltd. (“DIRTT”, the “Company”, “we”, “our”, “us” or “ours”) (TSX: DRT; OTC: DRTTF), a leader in industrialized construction, today announced its financial results for the three and twelve months ended December 31, 2024. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.

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Fourth Quarter 2024 Highlights and Recent Developments

• Revenue of $48.9 million, a decrease of $2.0 million or 4% from the same period in 2023, and a $5.5 million or 13% increase from the third quarter of 2024. Our annual revenue of $174.3 million was in line with the expected guidance range of $165–$175 million provided in the second quarter of 2024.

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• Gross profit and gross profit margin improved to $17.5 million or 35.9% of revenue in the fourth quarter of 2024 from $19.2 million or 37.8% of revenue in the same period of 2023.

• Net income after tax and net income margin for the quarter of $4.0 million and 8.3%, respectively, compared to a net income after tax of $1.0 million and a net income margin of 1.9% in the fourth quarter of 2023.

• Adjusted EBITDA⁽¹⁾ of $5.5 million (11.2% of revenue), compared to $4.3 million (8.5% of revenue) in the fourth quarter of 2023. Our annual Adjusted EBITDA⁽¹⁾ of $15.4 million exceeded the guidance range provided in the second quarter of 2024 of $12–$15 million.

• Liquidity, comprising of cash equivalents and available borrowings, increased to $39.3 million at December 31, 2024 compared to $34.3 million at September 30, 2024 and $35.0 million at December 31, 2023.

• On November 26, 2024, the Company announced that Holly Hess Groos joined the Board of Directors and was appointed as the Chair of the Audit Committee.

• On December 18, 2024, the Company announced a normal course issuer bid for its common shares (the “Shares NCIB”), which commenced on December 20, 2024 and will terminate no later than December 19, 2025. The Shares NCIB permits DIRTT to acquire up to 7,515,233 of its common shares. All purchases will be made on the open market through the facilities of the Toronto Stock Exchange (“TSX”) at the market price of common shares at the time of acquisition. Any common shares acquired through the Shares NCIB will be immediately cancelled.

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• On February 5, 2025, the US District Court for the Northern District of Utah redirected DIRTT’s lawsuit against Falkbuilt Ltd. (“Falkbuilt”) in Utah on procedural grounds to Canada. In DIRTT’s similar lawsuit against Falkbuilt in Canada, the Court of King’s Bench of Alberta has scheduled an eight-week trial to commence February 2, 2026. With the Canadian trial commencing less than a year away, DIRTT is pursuing damages and losses it suffered in Canada, the United States, and abroad in the Court of King’s Bench of Alberta.

• On February 13, 2025, the Company entered into a share repurchase agreement with NGEN III, LP (“NGEN”), pursuant to which the Company purchased for cancellation 3,920,844 common shares of DIRTT that were held by NGEN at a purchase price of $0.80 per NGEN Share (the “Share Repurchase”). The purchase price of $0.80 per share was a 1% discount to the market price on January 27, 2025. The common shares repurchased under the Share Repurchase were counted against DIRTT’s annual normal course issuer bid share limit, which is 3,422,494 common shares following the Share Repurchase. The Share Repurchase closed on February 14, 2025.

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• On February 20, 2025, the Company extended its credit facility with the Royal Bank of Canada (“RBC”) to November 30, 2025 (the “RBC Facility”). As part of the extension, the borrowing base maximum has been increased from C$15 million to C$25 million. In addition, the RBC Facility includes a C$5 million letter of credit facility guaranteed by the Export Development of Canada. Pursuant to an agreement between RBC, the Company and a surety company, the Company now has access to a $15 million bonding facility, subject to an individual maximum of $5 million. Under the terms of the facility with the surety company, any bonds issued will be secured through letters of credit issued through the RBC Facility.

(1) See “Non-GAAP Financial Measures”

Management Commentary

Benjamin Urban, chief executive officer, remarked “In early January, we finalized our 2025 budget, which includes investing in our commercial organization, innovation, talent and our proprietary software, ICE. We believe the risk of tariffs and pressure on construction in North America further solidifies our value propositions and the reasons to build with DIRTT. Additionally, we are pleased to have a trial date for the Falkbuilt Litigation of February 2, 2026. With the trial less than a year away, DIRTT is pursuing damages and losses suffered in Canada, the United States, and abroad in the Court of King’s Bench of Alberta. The Canadian Court will determine whether Falkbuilt, Mogens Smed, Barrie Loberg and others wrongfully caused DIRTT to suffer damages, which could exceed $50 million. We are confident in the strength of our case.”

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Fareeha Khan, chief financial officer, added “Our annual revenue and Adjusted EBITDA⁽¹⁾ results were on the higher end of the guidance range we provided in the second quarter of 2024. During 2024, we decreased our long-term debt by over 50%; at December 31, 2024, our cash balances exceeded our long-term debt balance. We are focused on continuing to strengthen our balance sheet and on increasing shareholder value. Looking to 2025, our focus is to execute our strategy and to be prepared in the eventuality of potential tariffs and related cautionary macroeconomic scenarios.”

Fourth Quarter 2024 Results

Fourth quarter 2024 revenue was $48.9 million, a decrease of $2.0 million, or 4% from $50.9 million for the same period in 2023. The decrease in revenue, as compared to the same period of 2023, was primarily the result of a higher volume of large projects completed in the fourth quarter of 2023. Full year 2024 revenue was in line with the expected guidance range of $165 million to $175 million provided in the second quarter of 2024.

Gross profit and gross profit margin for the quarter ended December 31, 2024 was $17.5 million or 35.9% of revenue, a decrease from $19.2 million or 37.8% of revenue for the same period of 2023. Adjusted Gross Profit and Adjusted Gross Profit Margin (see “Non-GAAP Financial Measures”) was $19.0 million or 38.8% of revenue. This represents a decrease from $20.1 million or 39.5% of revenue in the fourth quarter of 2023. These decreases in Adjusted Gross Profit Margin are the result of lower revenues and a $0.7 million increase to our inventory obsolescence provision.

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Sales and marketing expenses decreased by $1.2 million to $5.8 million for the quarter ended December 31, 2024, from $6.9 million for the quarter ended December 31, 2023. The decrease was driven by a $0.5 million decrease in salaries and benefits costs due to lower headcount, a $0.5 million decrease in commissions as a result of lower revenue and a $0.3 million decrease in building expenses, offset by a $0.1 million increase in other individual costs.

General and administrative expenses decreased by $0.5 million to $5.1 million for the quarter ended December 31, 2024, from $5.7 million for the quarter ended December 31, 2023. The decrease was driven by a $0.4 million decrease in costs of our facilities, a $0.4 million decrease in office costs and a $0.1 million decrease in salaries and benefits costs, offset by a $0.5 million increase in professional services costs related to the Shares NCIB as well as higher litigation costs.

Operations support expenses decreased by $0.4 million from $2.3 million for the quarter ended December 31, 2023, to $1.9 million for the quarter ended December 31, 2024. This decrease was primarily due to a decrease in salaries and benefits costs.

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Technology and development expenses decreased by $0.5 million to $1.3 million for the quarter ended December 31, 2024, from $1.8 million for the quarter ended December 31, 2023, primarily related to decreased salaries and benefits costs during the fourth quarter of 2024.

Stock-based compensation expense for the three months ended December 31, 2024 was $1.1 million compared to $(0.2) million in the same period of 2023. The increase in this expense was largely due to a higher number of restricted share units (“RSUs”) outstanding in 2024 compared to 2023 as well as higher share prices throughout the year at times of grant of RSUs and deferred share units.

Foreign exchange gain for the three months ended December 31, 2024 was $2.1 million compared to a loss of $0.6 million in the same period of 2023, due to the weakening of the Canadian dollar relative to the U.S. dollar. Approximately 60% of the Company’s costs are incurred in Canadian dollars.

Interest expense decreased by $0.8 million from $1.3 million for the fourth quarter of 2023 to $0.5 million for the fourth quarter of 2024. This decrease is largely due to repayment of debt throughout the year ended December 31, 2024.

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Net income after tax for the fourth quarter of 2024 was $4.0 million compared to a $1.0 million net income after tax for the same period of 2023. The increase in net income is primarily the result of a $2.0 million decrease in operating expenses (significantly, operating expenses in the fourth quarter of 2023 included a $0.8 million impairment charge on the Rock Hill facility which was not repeated in the fourth quarter of 2024), a $2.6 million increase in foreign exchange gain, a $0.8 million decrease in interest expense and a $0.3 million decrease in tax expense. These benefits were offset by a $1.7 million decrease in gross profit, and a $1.0 million decrease of gain on sale of software and patents which resulted from the completion of the knowledge transfer to Armstrong World Industries that occurred in the fourth quarter of 2023 and was not repeated in 2024.

Adjusted EBITDA (see “Non-GAAP Financial Measures”) for the quarter was $5.5 million, an improvement of $1.2 million from $4.3 million for the fourth quarter of 2023. Adjusted EBITDA Margin (see “Non-GAAP Financial Measures”) for the quarter was 11.2% of revenue, an improvement of 2.7% from 8.5% of revenue for the fourth quarter of 2023. Improvements in Adjusted EBITDA and Adjusted EBITDA Margin for the quarter were due to the above noted reasons.

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Outlook

The segment of construction that DIRTT operates in represents a $40 billion addressable market with increasing expansion opportunities. DIRTT continues to capture more market share by solving construction’s key challenges through innovative product development, technology-enabled efficiency, and a simplified installation process. Adoption of offsite, prefabricated construction is accelerating due to sustainability goals, trade labor shortages, and rising costs. DIRTT pioneered its unique construction method over 20 years ago and remains able to deliver schedule acceleration, cost certainty, unlimited aesthetic customization, and an end product that can be repurposed and reused to minimize waste. Everything we manufacture is de-mountable and infinitely re-configurable to adapt to the ever-changing needs of our customers.

Last quarter, we shared our strategic priorities through 2027, including revenue growth, continued expansion of DIRTT’s proprietary ICE software, accelerated innovation, and investment in talent. In the fourth quarter of 2024, we continued mapping our path to growth with a focus on innovating how we go to market. Our primary source of revenue remains our extensive network of independent DIRTT Construction Partners (“Construction Partners” or “Partners”). While we continue to develop and expand this network, including advancing 15 Partners to a higher status tier in 2025, we are also mapping additional growth paths to unlock greater pipeline. For example, we believe there are geographic areas of North America that lack sufficient coverage by our existing network into which we can expand and we are also expanding our offering to include more estimating, pre-construction, and installation services, both directly and through Partners. In 2024, we launched an additional go-to-market channel called Integrated Solutions. This team provides sales, design, estimating, and project delivery services with our Construction Partners and DIRTT sales representatives. Integrated Solutions increases our sales network’s capacity as well as targets revenues in channels without existing coverage. There are three key opportunity areas Integrated Solutions is focusing on; diversifying our customer profile, increasing volumes in smaller markets, and expanding into new sectors. Through these efforts, Integrated Solutions aims to simplify our go-to-market strategy and increase access to DIRTT’s portfolio of products.

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Raw material prices continue to increase and on February 11, 2025, we announced a price increase of 5% on all orders placed after March 18, 2025, and price adjustments on certain products in response to market feedback and to mitigate the impact of these rising costs.

We continue to advance our ICE offering, including the addition of several new features that streamline processes and reduce customer inquiries. In response to user feedback, we optimized the ICE Manager application to improve the interface and added an “Early Access” feature to allow beta testers and developers to access applications for further testing and improvement. An update in December 2024 introduced itemized part pricing and automated casework plan details, saving DIRTT 50 to 75 hours per week in designer time and improving efficiency for customers. We continue to evaluate artificial intelligence (“AI”) for software development, including catalogue creation. DIRTT is evaluating a code generative AI resource to develop a web-based freight quoting tool, with the potential to save approximately 200 hours of development time and remove a manual touch-point for our customers.

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DIRTT has made significant strides with product innovation and partnerships. For example, the COVE™, our low-acuity solution for emergency departments, officially launched in November 2024 and is already earning significant industry recognition. In addition to previously announced product awards from the 2024 Healthcare Facilities Symposium and Expo, we were recently awarded the Gold Touchstone Award from the Center for Health Design, and will be recognized in March at the 2025 International Summit & Exhibition on Health Facility Planning, Design & Construction PDC Summit. In the fourth quarter of 2024, we also released curved solid corners for our solid wall solution, which is already seeing strong demand with active project quotes in the market. We are also innovating our market approach through strategic partnerships. In December 2024, DIRTT joined the Siemen’s Xcelerator program to further drive our digital transformation in the construction sector by leveraging automation, Internet of Things and digital twin technology to seamlessly connect our physical assets with their digital counterparts. This will help enable continuous monitoring, predictive maintenance, optimized space utilization, and enhanced process efficiency.

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We have a bold operations goal of zero defects, missed deliveries, and workplace injuries. In 2024, DIRTT’s on time in full (OTIF) delivery performance was 99.1%, the highest in our history. We also achieved a total recordable incident rate (TRIF) of 0.82 for 2024, which is 80% below the industry average.

Through the fourth quarter of 2024, the US economy continued its economic expansion post-COVID with inflation reaching closer to the Federal Reserve 2% target. The recent pause in interest rate cuts by the Federal Reserve highlights a commitment to reaching a 2% target. The new administration in the United States has expressed support for deregulation, lower taxes, and creating a favorable economic climate for businesses in America. Return to office mandates have increased, with financial services and technology leading the way. Additionally, a favorable environment for mergers and acquisitions will be an additional demand driver for interior construction. The Kastle Systems weekly occupancy index continues to trend upwards. On the other hand, recent reports of Department of Government Efficiency suggests there may be decreased demand on our General Services Administration Contract, which represented less than 0.6% of our revenues in 2024. The impact of these various developments on our business is uncertain.

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We see continued demand growth in our healthcare segment with national spending growing significantly since pre-COVID and are dedicating resources to capture this trend. Similarly, national education construction spending surpassed its pre-COVID highs in 2024. Overall, excluding the tariff risk described below, we are observing a supportive macro-economic environment in the United States that we believe will support increasing demand of our products.

The announcement in February 2025 of a 25% tariff on all Canadian imports into the U.S., and Canada’s subsequent announcement of retaliatory tariffs on U.S. good imported into Canada, has created uncertainty across multiple sectors, including the construction industry. While Canada and the U.S. have agreed to delay the imposition of such tariffs until March 6, 2025, the ultimate extent and duration of such tariffs is unknown, and significant uncertainty continues to exist in respect of future tariffs or other trade barriers in general. In addition, on February 10, 2025, an Executive Order was issued by the White House imposing 25% tariffs on steel and aluminum entering the U.S., effective March 12, 2025. As at the date hereof, the outcome and extent of these tariffs is uncertain. 92% of DIRTT’s raw materials are from North America, and DIRTT has manufacturing facilities both in the U.S. and Canada. Our Canadian facilities import some raw materials from the U.S., and our U.S. facilities import some raw materials from Canada. While tariffs would have a cost impact on our business, we believe our presence in both Canada and the U.S. provides us with strategic flexibility. We have been, and continue to be, proactively preparing for potential tariffs and we believe that we have multiple paths to mitigate the impact of tariffs on our business, including alternative material sourcing and manufacturing locations.

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We are maintaining our previously provided 2025 guidance, which is set forth below. Given the significant uncertainty surrounding tariffs, our 2025 guidance may not be realized should any significant tariff impacts arise subsequent to the date hereof.

• 2025 Revenue: $194 to 209 million
• 2025 Adjusted EBITDA: $18 to 25 million

We finalized our 2025 budget in early January 2025. We plan to increase our capital expenditure by more than 50% from 2024, as we continue to invest in improving efficiencies in our plants, investing in our DXC footprint and investments in ICE.

Conference Call and Webcast Details

A conference call and webcast for the investment community is scheduled for February 27, 2025 at 08:00 a.m. MDT (10:00 a.m. EDT). The call and webcast will be hosted by Benjamin Urban, chief executive officer, and Fareeha Khan, chief financial officer.

The call is being webcast live on the Company’s website at dirtt.com. Alternatively, click here to listen to the live webcast. The webcast is listen-only.

A webcast replay of the call will be available on DIRTT’s website.

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Statement of Operations

(Unaudited – Stated in thousands of U.S. dollars)

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Non-GAAP Financial Measures

Our Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These GAAP financial statements include non-cash charges and other charges and benefits that we believe are unusual or infrequent in nature or that we believe may make comparisons to our prior or future performance difficult.

As a result, we also provide financial information in this news release that is not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. Management uses these non-GAAP financial measures in its review and evaluation of the financial performance of the Company. We believe that these non-GAAP financial measures also provide additional insight to investors and securities analysts as supplemental information to our GAAP results and as a basis to compare our financial performance period-over-period and to compare our financial performance with that of other companies. We believe that these non-GAAP financial measures facilitate comparisons of our core operating results from period to period and to other companies by removing the effects of our capital structure (net interest income on cash deposits, interest expense on outstanding debt and debt facilities, or foreign exchange movements), asset base (depreciation and amortization), the impact of under-utilized capacity on gross profit, tax consequences, reorganization expense, unusual or infrequent charges or gains (such as gain on sale of software and patents, gain on extinguishment of debt, and impairment charges), stock-based compensation, related party expense, and government subsidies. We remove the impact of foreign exchange gain (loss) from Adjusted EBITDA. Foreign exchange gains and losses can vary significantly period-to-period due to the impact of changes in the U.S. and Canadian dollar exchange rates on foreign currency denominated monetary items on the balance sheet and are not reflective of the underlying operations of the Company. In periods where production levels are abnormally low, unallocated overheads are recognized as an expense in the period in which they are incurred. In addition, management bases certain forward-looking estimates and budgets on non-GAAP financial measures, primarily Adjusted EBITDA. We have not reconciled forward-looking non-GAAP measures, including Adjusted EBITDA guidance, to its corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to non-operating income and expenditures, which are difficult to predict and subject to change.

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Government subsidies, depreciation and amortization, stock-based compensation expense, reorganization expense, foreign exchange gains and losses, gain on extinguishment of debt, impairment charges, gain on sale of software and patents, net interest income on cash deposits, interest expense on outstanding debt and debt facilities, tax expense, and related party expense are excluded from our non-GAAP financial measures because management considers them to be outside of the Company’s core operating results, even though some of those receipts and expenses may recur, and because management believes that each of these items can distort the trends associated with the Company’s ongoing performance. We believe that excluding these receipts and expenses provides investors and management with greater visibility to the underlying performance of the business operations, enhances consistency and comparativeness with results in prior periods that do not, or future periods that may not, include such items, and facilitates comparison with the results of other companies in our industry.

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The following non-GAAP financial measures are presented in this news release, and a description of the calculation for each measure is included.

You should carefully evaluate these non-GAAP financial measures, the adjustments included in them, and the reasons we consider them appropriate for analysis supplemental to our GAAP information. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider any of these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. You should also be aware that we may recognize income or incur expenses in the future that are the same as, or similar to, some of the adjustments in these non-GAAP financial measures. Because these non-GAAP financial measures may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

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The following table presents a reconciliation for the three and twelve months ended December 31, 2024 and 2023 of EBITDA and Adjusted EBITDA to our net income (loss) after tax, and of Adjusted EBITDA Margin to net income (loss) margin, which are the most directly comparable GAAP measure for the periods presented:

(Unaudited – Stated in thousands of U.S. dollars)

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(1) Net income (loss) after tax divided by revenue.
(2) The related party transaction is a non-recurring transaction that is not core to our business and is excluded from the Adjusted EBITDA calculation (refer to Note 24 of the consolidated financial statements).
(3) Reorganization expenses, the gain on sale of software and patents, the gain on extinguishment of convertible debt, the impairment charge on the Rock Hill facility and government subsidies are not core to our business and are therefore excluded from the Adjusted EBITDA calculation (refer to Note 4, Note 5, Note 6 and Note 7 of the consolidated financial statements).

The following table presents a reconciliation for the three and twelve months ended December 31, 2024 and 2023 of Adjusted Gross Profit to our gross profit and Adjusted Gross Profit Margin to gross profit margin, which are the most directly comparable GAAP measures for the periods presented:

(Unaudited – Stated in thousands of U.S. dollars)

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Special Note Regarding Forward-Looking Statements

Certain statements contained in this news release are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 and “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this news release, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this news release, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” “outlook,” “may,” “will,” “should,” “would,” “could,” “can,” “continue,” the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. In particular and without limitation, this news release contains forward-looking information pertaining to the effect of our strategic priorities on increasing value creation; the application of our processes and technology and the benefits therefrom, forecast operating and financial results, including 2025 revenue, and the impact of certain cost-saving measures, including the development, timing and success of strategic accounts, the outcome of non-dilutive strategy initiatives, the competitiveness of the Company’s solutions, the liquidity and capital resources of the Company, the effects that current claims against the Company and expiring patents will have on the Company’s business, financial condition, results of operations and growth prospects; the adaptability and lifespan of our products; the effect of tariffs on our business, including on our 2025 guidance, and our ability to mitigate any such effects; our beliefs about future revenue and Adjusted EBITDA, and the timing thereof; potential cost savings as a result of using artificial intelligence technology; project delivery and the timing thereof; our goals relating to defects, deliveries and workplace injuries; capital expenditures and allocation; our executive management team; the outcome of the Falkbuilt Litigation; general economic conditions; the new administration in the United States and potential policies implemented or stances taken by such new administration; our ability to weather economic conditions and invest in technology, commercial organizations, innovation and talent; and the effect that sustainability-related building standards established by organizations, such as, the U.S. Green Building Council, International Living Future Institute, and the International WELL Building Institute, among others, will have on demand for our products, systems and services in the U.S. market.

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Forward-looking statements are based on certain estimates, beliefs, expectations, and assumptions made in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate.

Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those contained in, or expressed or implied by such statements. Due to the risks, uncertainties, and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects include, but are not limited to, risks described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission and applicable securities commissions or similar regulatory authorities in Canada on February 26, 2025.

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Our past results of operations are not necessarily indicative of our future results. You should not place undue reliance on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.

About DIRTT Environmental Solutions

DIRTT is a leader in industrialized construction. DIRTT’s system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes. DIRTT’s interior construction solutions are designed to be highly flexible and adaptable, enabling organizations to easily reconfigure their spaces as their needs evolve. Headquartered in Calgary, AB Canada, DIRTT trades on the Toronto Stock Exchange under the symbol “DRT”.

FOR FURTHER INFORMATION PLEASE CONTACT ir@dirtt.com

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MONTREAL, Feb. 26, 2025 (GLOBE NEWSWIRE) — NanoXplore Inc. (TSX: GRA) (“NanoXplore” or the “Corporation”) is pleased to announce that the Toronto Stock Exchange (TSX) has approved the Corporation’s request to adopt a new normal course issuer bid (NCIB) program, through which NanoXplore may purchase, for cancellation, up to 5,976,834 common shares or approximately 5% of the public float (consisting of 119,536,699 common shares as of February 24, 2025, out of the 170,608,431 common shares issued and outstanding). The Corporation may purchase shares under the NCIB over a period of twelve months commencing on March 1, 2025 and ending February 28, 2026, when the bid expires. NCIB purchases are made through the facilities of the TSX and Canadian Alternative Trading Systems (such as Nasdaq CXC and CX2, TSX Alpha Exchange and Omega ATS) and the price for any repurchased shares will be the prevailing market price at the time of the acquisition.

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All common shares purchased by the Corporation will be cancelled. The number of shares repurchased on any given day may not exceed 18,141 common shares, which is equal to 25% of the average daily trading volume on the TSX for the six-month period ending January 31, 2025 except where purchases are made in accordance with the “block purchase exception” of the TSX rules. The average daily volume for this period was calculated in accordance with the rules of the TSX and is equal to 72,567 common shares.

The Corporation’s Board of Directors believes that the purchase by the Corporation of its own common shares may, in appropriate circumstances, be a responsible investment of funds on hand.

The extent to which NanoXplore repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by NanoXplore’s management team. The Corporation will use funds from its existing cash balances to purchase the shares.

Under the previously approved NCIB, which commenced on December 1, 2023, and terminated on November 30, 2024, NanoXplore could repurchase up to 5,936,205 common shares. No common shares were repurchased under the previous NCIB.

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ABOUT
NANOXPLORE

NanoXplore is a graphene company, a manufacturer and supplier of high-volume graphene powder for use in transportation and industrial markets. Also, the Corporation provides standard and custom graphene-enhanced plastic and composite products to various customers in transportation, packaging, electronics, and other industrial sectors. The Corporation is also a silicon-graphene-enhanced Li-ion battery manufacturer for the Electric Vehicle and grid storage markets. NanoXplore is headquartered in Montreal, Quebec with manufacturing facilities in Canada, the United States and Europe.

FORWARD-LOOKING
STATEMENTS

This press release contains forward-looking statements and forward-looking information (together, “forward-looking statements”) within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements, and subject to risks and uncertainties. All forward-looking statements are based on our beliefs as well as assumptions based on information available at the time the assumption was made and on management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors deemed appropriate in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Forward-looking statements are not facts, but only predications and can generally be identified by the use of statements that include phrases such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “foresee”, “grow”, “expect”, “plan”, “intend”, “forecast”, “future”, “guidance”, “may”, “predict”, “project”, “should”, “strategy”, “target”, “will” or similar expressions suggesting future outcomes.

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Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties. Such forward-looking information necessarily involves known and unknown risks and uncertainties, including the relevant assumptions and risks factors set out in NanoXplore’s most recent annual management discussion and analysis filed on SEDAR+ at www.sedarplus.ca, which may cause NanoXplore’s actual results to differ materially from any projections of future results expressed or implied by such forward-looking information. These risks, uncertainties and other factors include, among others, the uncertain and unpredictable condition of global economy. Any forward-looking information is made as of the date hereof and, except as required by law, NanoXplore does not undertake any obligation to update or revise any forward–looking statement as a result of new information, subsequent events or otherwise.

Forward-looking statements reflect management’s current beliefs, expectations and assumptions and are based on information currently available to management. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated by such statements.

No securities regulatory authority has either approved or disapproved the contents of this press release.

For further information, please contact:

Pierre Yves Terrisse
Vice-President Corporate Development
pyterrisse@nanoXplore.ca | Tel: 1 438 476-1965

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NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

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CALGARY, Alberta, Feb. 20, 2025 (GLOBE NEWSWIRE) — Prairie Provident Resources Inc. (“Prairie Provident” or the “Company”) (TSX:PPR) is pleased to announce the closing of the first tranche of its recently announced equity financing, for $4,800,000 in gross proceeds from its principal and largest shareholder, PCEP Canadian Holdco, LLC (“PCEP”) upon the issue of 112,941,176 common shares (“Common Shares”) at a price of $0.0425 per Common Share (the “First Tranche Closing”).

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The First Tranche Closing is part of the $9,100,000 brokered equity financing previously announced by the Company, led by Research Capital Corporation as the lead agent and sole bookrunner on behalf of a syndicate of agents including Haywood Securities Inc. (collectively the “Agents”) and consisting of:

1. an offering up to 96,470,589 units of the Company (“Units”) at a price of $0.0425 per Unit for gross proceeds of up to $4,100,000, on a prospectus-exempt basis pursuant to the ‘listed issuer financing exemption’ (LIFE) under applicable Canadian securities laws (the “LIFE Offering”), with (i) each Unit consisting of one Common Share and one Common Share purchase warrant (“Warrant”), and (ii) each Warrant to entitle the holder to subscribe for and purchase one Common Share at an exercise price of $0.05 for a period of 36 months following closing; and
2. a private placement of up to 117,647,059 Common Shares at a price of $0.0425 per Common Share for gross proceeds of up to $5,000,000, pursuant to available exemptions from the prospectus requirements of applicable Canadian securities laws (the “Private Placement” and, together with the LIFE Offering, the “Offerings”). Warrants will not be issued to purchasers under the Private Placement.

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The First Tranche Closing was completed under the Private Placement.

Prairie Provident’s Top Tier Basal Quartz Play in Michichi: A Unique Publicly Traded BQ Junior

Prairie Provident has established its Basal Quartz (“BQ”) play in the Michichi core area as a significant growth driver, supported by robust well economics, an extensive drilling inventory, and strategic infrastructure. The Company has a land position of approximately 153,000 net acres (239 net sections) in Michichi, of which it has identified over 40 horizontal BQ drilling opportunities, providing ample room for growth. Publicly-available industry data indicates that production along the BQ trend has surpassed 40,000 boe/d (77% liquids), with operators having drilled over 100 horizontal wells in 2024 alone, further de-risking the play. Offset competitor wells in analogous zones have demonstrated peak production rates exceeding 1,200 bbl/d, further validating the play’s potential. The BQ play offers attractive returns and payouts, making it, in the Company’s view, one of the most competitive plays in the Western Canadian Sedimentary Basin (WCSB). Based on internal estimates, the Company’s BQ wells have the potential to deliver impressive internal rates of return greater than 300% (based on WTI US$70/bbl and AECO C$3.00/mcf) with payout periods of approximately eight months or less.

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Additional Financing Details

As previously disclosed, PCEP and certain directors and officers of the Company intended to participate in the Offerings in an aggregate amount of approximately $7,350,000 (collectively, the “Lead Orders”). The First Tranche Closing represents $4,800,000 of this participation, with the remaining $2,550,000 in Lead Orders provided for through director commitments and the Company’s subscription agreement with PCEP. Prairie Provident expects $200,000 of the remaining Lead Orders to be fulfilled under the Private Placement and $2,350,000 to be fulfilled under the LIFE Offering. All subscriptions on account of Lead Orders are subject to insider participation limits under applicable Toronto Stock Exchange rules.

Prairie Provident intends to use the net proceeds from the Offerings to drill two additional Basal Quartz horizontal wells in the first quarter of 2025 and for working capital and general corporate purposes, including expenses related to the Offerings.

The second and final tranche of the Offerings is expected to occur on or about February 27, 2025.

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For further details regarding the Offerings, please refer to the Company’s press release dated February 11, 2025.

There is an offering document related to the LIFE Offering that can be accessed under the Company’s issuer profile at www.sedarplus.ca and on the Company’s website at www.ppr.ca. Prospective investors should read this offering document before making an investment decision.

The Common Shares issued in the First Tranche Closing are subject to a statutory hold period of four months plus a day from February 20, 2025.

In connection with the First Tranche Closing, the Company paid the Agents an advisory fee equal to 1% of gross proceeds.

This news release does not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of, any securities in the United States or to or for the account or benefit of U.S. persons or persons in the United States, or in any other jurisdiction in which, or to or for the account or benefit of any other person to whom, any such offer, solicitation or sale would be unlawful. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons or persons in the United States except in compliance with, or pursuant to an available exemption from, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. “United States” and “U.S. person” have the meanings ascribed to them in Regulation S under the U.S. Securities Act.

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Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions

PCEP’s purchase of Common Shares under the First Tranche Closing did, and the further Lead Order subscriptions as contemplated above will, constitute ‘related party transactions’ for the Company within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which are exempt from the formal valuation and minority approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(a) thereof on the basis that neither the fair market value of the subject matter of the transactions, nor the fair market value of the consideration for the transactions, insofar as they involve interested parties, exceeds 25% of the Company’s market capitalization as calculated for purposes of MI 61-101. Prairie Provident did not file a material change report 21 days before completion of the First Tranche Closing and, if applicable, will not be filing one at least 21 days before the anticipated closing date of the second and final tranche of the Offerings, as the overall transaction timetable is less than 21 days from commencement to closing and it is commercially impracticable to delay the process.

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ABOUT PRAIRIE PROVIDENT

Prairie Provident is a Calgary-based company engaged in the exploration and development of oil and natural gas properties in Alberta, including a position in the emerging Basal Quartz trend in the Michichi area of Central Alberta.

For further information, please contact:

Dale Miller, Executive Chairman
Phone: (403) 292-8150
Email:  info@ppr.ca

Forward-Looking Information

This news release contains certain statements (“forward-looking statements”) that constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future performance, events or circumstances, are based upon internal assumptions, plans, intentions, expectations and beliefs, and are subject to risks and uncertainties that may cause actual results or events to differ materially from those indicated or suggested therein. All statements other than statements of current or historical fact constitute forward-looking statements. Forward-looking statements are typically, but not always, identified by words such as “anticipate”, “believe”, “expect”, “intend”, “plan”, “budget”, “forecast”, “target”, “estimate”, “propose”, “potential”, “project”, “seek”, “continue”, “may”, “will”, “should” or similar words suggesting future outcomes or events or statements regarding an outlook.

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Without limiting the foregoing, this news release contains forward-looking statements pertaining to: Basal Quartz drilling opportunities, including estimated payout periods on potential Basal Quartz wells; completion of the second and final tranche of the Offerings, the expected closing date thereof, and fulfillment of the Lead Orders therein; the intended use of proceeds from the Offerings; and the intended number of Basal Quartz wells that are anticipated to be drilled by the Company in the first quarter of 2025.

Forward-looking statements are based on a number of material factors, expectations or assumptions of Prairie Provident which have been used to develop such statements, but which may prove to be incorrect. Although the Company believes that the expectations and assumptions reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements, which are inherently uncertain and depend upon the accuracy of such expectations and assumptions. Prairie Provident can give no assurance that the forward-looking statements contained herein will prove to be correct or that the expectations and assumptions upon which they are based will occur or be realized. Actual results or events will differ, and the differences may be material and adverse to the Company. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: results from drilling and development activities; consistency with past operations; the quality of the reservoirs in which Prairie Provident operates and continued performance from existing wells (including with respect to production profile, decline rate and product type mix); the continued and timely development of infrastructure in areas of new production; the accuracy of the estimates of Prairie Provident’s reserves volumes; future commodity prices; future operating and other costs; future USD/CAD exchange rates; future interest rates; continued availability of external financing and internally generated cash flow to fund Prairie Provident’s current and future plans and expenditures, with external financing on acceptable terms; the impact of competition; the general stability of the economic and political environment in which Prairie Provident operates; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Prairie Provident to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Prairie Provident has an interest in to operate the field in a safe, efficient and effective manner; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Prairie Provident to secure adequate product transportation; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Prairie Provident operates; and the ability of Prairie Provident to successfully market its oil and natural gas production.

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The forward-looking statements included in this news release are not guarantees of future performance or promises of future outcomes and should not be relied upon. Such statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements including, without limitation: reduced access to external debt financing; higher interest costs or other restrictive terms of debt financing; changes in realized commodity prices; changes in the demand for or supply of Prairie Provident’s products; the early stage of development of some of the evaluated areas and zones; the potential for variation in the quality of the geologic formations targeted by Prairie Provident’s operations; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; the imposition of any tariffs or other restrictive trade measures or countermeasures affecting trade between Canada and the United States; changes in development plans of Prairie Provident or by third party operators; increased debt levels or debt service requirements; inaccurate estimation of Prairie Provident’s oil and reserves volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and such other risks as may be detailed from time-to-time in Prairie Provident’s public disclosure documents (including, without limitation, those risks identified in this news release and Prairie Provident’s current Annual Information Form dated April 1, 2024 as filed with Canadian securities regulators and available from the SEDAR+ website (www.sedarplus.ca) under Prairie Provident’s issuer profile).

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The forward-looking statements contained in this news release speak only as of the date of this news release, and Prairie Provident assumes no obligation to publicly update or revise them to reflect new events or circumstances, or otherwise, except as may be required pursuant to applicable laws. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Oil and Gas Reader Advisories

Barrels of Oil Equivalent

The oil and natural gas industry commonly expresses production volumes and reserves on a “barrel of oil equivalent” basis (“boe”) whereby natural gas volumes are converted at the ratio of six thousand cubic feet to one barrel of oil. The intention is to sum oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants. A boe conversion ratio of six thousand cubic feet to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip. It does not represent a value equivalency at the wellhead nor at the plant gate, which is where Prairie Provident sells its production volumes. Boe’s may therefore be a misleading measure, particularly if used in isolation. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency ratio of 6:1, utilizing a 6:1 conversion ratio may be misleading as an indication of value.

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Analogous Information

Information in this news release regarding initial production rates from offset wells drilled by other industry participants located in geographical proximity to the Company’s lands may constitute “analogous information” within the meaning of National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (NI 51-101). This information is derived from publicly available information sources (as at the date of this news release) that Prairie Provident believes (but cannot confirm) to be independent in nature. The Company is unable to confirm that the information was prepared by a qualified reserves evaluator or auditor within the meaning of NI 51-101, or in accordance with the Canadian Oil and Gas Evaluation (COGE) Handbook. Although the Company believes that this information regarding geographically proximate wells helps management understand and define reservoir characteristics of lands in which Prairie Provident has an interest, the data relied upon by the Company may be inaccurate or erroneous, may not in fact be indicative or otherwise analogous to the Company’s land holdings, and may not be representative of actual results from wells that may be drilled or completed by the Company in the future.

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Potential Drilling Opportunities vs Booked Locations

This news release refers to potential drilling opportunities and booked locations. Unless otherwise indicated, references to booked locations in this news release are references to proved drilling locations or probable drilling locations, being locations to which Sproule Associated Limited (Sproule) attributed proved or probable reserves in its most recent year-end evaluation of Prairie Provident’s reserves data, effective December 31, 2023. Sproule’s year‑end evaluation was in accordance with NI 51-101 and, pursuant thereto, the COGE Handbook. References in this news release to potential drilling opportunities are references to locations for which there are no attributed reserves or resources, but which the Company internally estimates can be drilled based on current land holdings, industry practice regarding well density, and internal review of geologic, geophysical, seismic, engineering, production and resource information. There is no certainty that the Company will drill any particular locations, or that drilling activity on any locations will result in additional reserves, resources or production. Locations on which Prairie Provident in fact drills wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, commodity prices, costs, actual drilling results, additional reservoir information and other factors. There is a higher level of risk associated with locations that are potential drilling opportunities and not booked locations. Prairie Provident generally has less information about reservoir characteristics associated with locations that are potential drilling opportunities and, accordingly, there is greater uncertainty whether wells will ultimately be drilled in such locations and, if drilled, whether they will result in additional reserves, resources or production.

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Type Well Information

Information contained in this news release regarding estimated payout periods and internal rate of return (IRR) on potential Basal Quartz wells is based on the Company’s internally-defined type wells. Type well information reflects Prairie Provident’s expectations and experience in relation to wells of the indicated types, including with respect to costs, production and decline rates. There is no assurance that actual well-related results (including payout periods and IRR) will be in accordance with those suggested by the type well information. Actual results will differ, and the difference may be material.

Payout

Prairie Provident considers payout on a well to be achieved when future net revenue from the well is equal to the capital costs to drill, complete, equip and tie-in the well based on project economics. Forecasted payout periods disclosed in this news release are based on the following commodity price and CAD/USD exchange rate assumptions: USD $70.00/bbl WTI, CAD $3.00/Mcf AECO, CAD $1.35-to-USD $1.00.

Initial Production Rates

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This news release discloses initial production rates for certain wells as indicated. Initial production rates are not necessarily indicative of long-term well or reservoir performance or of ultimate recovery. Actual results will differ from those realized during an initial short-term production period, and the difference may be material.

Non-GAAP Measures

This news release uses the financial measure internal rate of return (IRR). IRR is a non-GAAP financial measure within the meaning of applicable Canadian securities laws , which does not have a standardized or prescribed meaning under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-GAAP measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS. IRR is a measure used in financial analysis to estimate the profitability of potential investments and/or projects, and means the discount rate that makes the net present value equal to zero in a discounted cash flow analysis.

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CALGARY, Alberta, Feb. 20, 2025 (GLOBE NEWSWIRE) — TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the fourth quarter and year ended Dec. 31, 2024.

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“Our business delivered solid results within the upper range of our guidance, driven by high availability across our generation portfolio, along with the enduring performance of our optimization and hedging strategies. During the year, we added 2.2 GW of generation to our fleet, with three contracted wind facilities achieving commercial operation in addition to the acquisition of Heartland Generation. We also returned $214 million, or $0.71 per share, of value to shareholders through dividends and share repurchases at an average price of $10.59 per share,” said John Kousinioris, President and Chief Executive Officer of TransAlta.

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“Given our confidence in the future, we are pleased to announce that our Board of Directors has approved an eight per cent increase to our common share dividend, now equivalent to $0.26 per share on an annualized basis. This represents our sixth consecutive annual dividend increase, affirming our Company’s commitment to returning value to shareholders,” added Mr. Kousinioris.

“Our portfolio of generating facilities continues to perform well. In 2025, we expect to generate between $450 and $550 million of free cash flow. We maintain a balanced, prudent and disciplined approach to capital allocation and balance sheet strength. We remain focused on advancing development opportunities at our legacy thermal energy campuses, along with pursuing longer term growth options with a commitment to maximizing shareholder value. Looking to 2025 and beyond, I am optimistic about our Company’s momentum and opportunities.”

Fourth Quarter 2024 Financial Highlights

• Adjusted EBITDA⁽¹⁾ of $285 million, compared to $289 million for the same period in 2023
• Free Cash Flow (FCF)⁽¹⁾ of $48 million, or $0.16 per share, compared to $121 million, or $0.39 per share, for the same period in 2023
• Cash flow from operating activities of $215 million, compared to $310 million from the same period in 2023
• Net loss attributable to common shareholders of $65 million, or $0.22 per share, compared to $84 million, or $0.27 per share, for the same period in 2023

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Full Year 2024 Financial Highlights

• Achieved the upper range of both 2024 adjusted EBITDA and FCF guidance
• Returned $143 million of capital to common shareholders through the buyback of 13.5 million common shares at an average price of $10.59 per share
• Adjusted EBITDA of $1,253 million, compared to $1,632 million from the same period in 2023
• FCF of $569 million, or $1.88 per share, compared to $890 million, or $3.22 per share, from the same period in 2023
• Net earnings attributable to common shareholders of $177 million, or $0.59 per share, compared to $644 million, or $2.33 per share, from the same period in 2023
• Exited 2024 with a strong financial position, with adjusted net debt to adjusted EBITDA of 3.6 times and available liquidity of $1.6 billion

Other Business Highlights and Updates

• Announced an annual dividend increase of eight per cent, now equivalent to $0.26 per share on an annualized basis, which represents the sixth year of consecutive dividend growth
• Provided 2025 guidance including adjusted EBITDA of $1.15 to $1.25 billion and FCF of $450 to $550 million, or $1.51 to $1.85 per share
• Completed the acquisition of Heartland Generation at a purchase price of $542 million in December 2024, which added 1.7 GW to gross installed capacity
• Achieved strong operational availability of 91.2 per cent in 2024, compared to 88.8 per cent in 2023
• 2024 Total Recordable Injury Frequency of 0.56 compared to 0.30 in 2023
• Reduced scope 1 and 2 GHG emissions intensity in 2024 to 0.35 tCO₂e/MWh from 2023 levels of 0.41 tCO₂e/MWh
• Achieved commercial operation at the White Rock West and East wind facilities in January and April 2024, respectively
• Achieved commercial operation at the Horizon Hill facility in May 2024
• Completed the Mount Keith 132kV expansion project during the first quarter of 2024

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Key Business Developments

Declared Increase in Common Share Dividend
The Company’s Board of Directors has approved a $0.02 annualized increase to the common share dividend, or 8 per cent increase, and declared a dividend of $0.065 per common share to be payable on July 1, 2025 to shareholders of record at the close of business on June 1, 2025. The quarterly dividend of $0.065 per common share represents an annualized dividend of $0.26 per common share.

TransAlta Acquired Heartland Generation from Energy Capital Partners

On Dec. 4, 2024, the Company closed the acquisition of Heartland Generation Ltd. and certain affiliates (collectively, Heartland) for a purchase price of $542 million from an affiliate of Energy Capital Partners (ECP), the parent of Heartland (the Transaction). To meet the requirements of the federal Competition Bureau, the Company entered into a consent agreement with the Commissioner of Competition pursuant to which TransAlta agreed to divest Heartland’s Poplar Hill and Rainbow Lake assets (the Planned Divestitures) following closing of the Transaction. In consideration of the Planned Divestitures, TransAlta and ECP agreed to a reduction of $80 million from the original purchase price for the Transaction. ECP will be entitled to receive the proceeds from the sale of Poplar Hill and Rainbow Lake, net of certain adjustments following completion of the Planned Divestitures. TransAlta also received a further $95 million at closing of the Transaction to reflect the economic benefit of the Heartland business arising from Oct. 31, 2023 to the closing date of the Transaction, pursuant to the terms of the share purchase agreement. The net cash payment for the Transaction, before working capital adjustments, totalled $215 million, and was funded through a combination of cash on hand and draws on TransAlta’s credit facilities.

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Excluding the Planned Divestitures, the Transaction adds 1.7 GW (net interest) of complementary capacity from nine facilities, including contracted cogeneration and peaking generation, legacy gas-fired thermal generation, and transmission capacity, all of which will be critical to support reliability in the Alberta electricity market.

Mothballing of Sundance Unit 6

On Nov. 4, 2024, the Company provided notice to the Alberta Electric System Operator (AESO) that Sundance Unit 6 will be mothballed on April 1, 2025, for a period of up to two years depending on market conditions. TransAlta maintains the flexibility to return the mothballed unit to service when market fundamentals improve or opportunities to contract are secured. The unit remains available and fully operational for the first quarter of 2025.

Production Tax Credit (PTC) Sale Agreements

On Feb. 22, 2024, the Company entered into 10-year transfer agreements with an AA- rated customer for the sale of approximately 80 per cent of the expected PTCs to be generated from the White Rock and the Horizon Hill wind facilities.

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On June 21, 2024, the Company entered into an additional 10-year transfer agreement with an A+ rated customer for the sale of the remaining 20 per cent of the expected PTCs.

The expected average annual EBITDA⁽¹⁾ from the two agreements is approximately $78 million (US$57 million).

Normal Course Issuer Bid (NCIB)

TransAlta remains committed to enhancing shareholder returns through appropriate capital allocation such as share buybacks and its quarterly dividend. In the first quarter of 2024, the Company announced an enhanced common share repurchase program for 2024, allocating up to $150 million, and targeting up to 42 per cent of 2024 FCF guidance, to be returned to shareholders in the form of share repurchases and dividends.

On May 27, 2024, the Company announced that it had received approval from the Toronto Stock Exchange to purchase up to 14 million common shares pursuant to an NCIB during the 12-month period that commenced May 31, 2024, and terminates May 31, 2025. Any common shares purchased under the NCIB will be cancelled.

For the year ended Dec. 31, 2024, the Company purchased and cancelled a total of 13,467,400 common shares at an average price of $10.59 per common share, for a total cost of $143 million, including taxes.

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Horizon Hill Wind Facility Achieves Commercial Operation

On May 21, 2024, the 202 MW Horizon Hill wind facility achieved commercial operation. The facility is located in Logan County, Oklahoma and is fully contracted to Meta Platforms Inc. for the offtake of 100 per cent of the generation.

White Rock Wind Facilities Achieve Commercial Operation

On Jan. 1, 2024, the 100 MW White Rock West wind facility achieved commercial operation. On April 22, 2024, the 202 MW White Rock East wind facility also completed commissioning. The facilities are located in Caddo County, Oklahoma and are contracted under two long-term power purchase agreements (PPAs) with Amazon Energy LLC for the offtake of 100 per cent of the generation.

Mount Keith 132kV Expansion Complete

The Mount Keith 132kV expansion project, located in Western Australia, was completed during the first quarter of 2024. The expansion was developed under the existing PPA with BHP Nickel West (BHP), which extends until Dec. 31, 2038. The expansion will facilitate the connection of additional generating capacity to the transmission network which supports BHP’s operations.

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Year Ended and Fourth Quarter 2024 Highlights

Segmented Financial Performance

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Full Year 2024 Financial Results Summary

For the year ended Dec. 31, 2024, the Company demonstrated strong financial and operational performance. The results were within the upper range of management’s expectations due to active management of the Company’s merchant portfolio and hedging strategies. During 2024, the Company settled a higher volume of hedges at prices that were significantly above the spot market in Alberta and achieved commercial operation at the White Rock and Horizon Hill wind facilities. On Dec. 4, 2024, the Company completed the acquisition of Heartland Generation, which added 1.7 GW to gross installed capacity. Refer to the Significant and Subsequent Events section of our MD&A dated Dec. 31, 2024, for details on the Heartland acquisition and the Planned Divestitures.

Availability for the year ended Dec. 31, 2024, was 91.2 per cent, compared to 88.8 per cent in 2023, an increase of 2.4 percentage points, primarily due to:

• The addition of the White Rock and Horizon Hill wind facilities; and
• The return to service of the Kent Hills wind facilities.

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Total production for the year ended Dec. 31, 2024, was 22,811 GWh, compared to 22,029 GWh for the same period in 2023, an increase of 782 GWh, or four per cent, primarily due to:

• Production from new facilities, including the White Rock West and East wind facilities commissioned in January and April 2024, respectively, the Horizon Hill wind facility commissioned in May 2024, and the Northern Goldfields solar facilities commissioned in November 2023;
• Production from the facilities acquired with Heartland;
• Favourable market conditions in the Ontario wholesale power market that enabled higher dispatch at the Sarnia facility in the Gas segment that resulted in higher merchant production to the Ontario grid;
• The return to service of the Kent Hills wind facilities in the first quarter of 2024; and
• Full-year production from the Garden Plain wind facility; partially offset by
• Increased economic dispatch at the Centralia facility due to lower market prices compared to the prior year in the Energy Transition segment; and
• Higher dispatch optimization in Alberta.

Adjusted EBITDA for the year ended Dec. 31, 2024, was $1,253 million, compared to $1,632 million in 2023, a decrease of $379 million, or 23.2 per cent. The major factors impacting adjusted EBITDA include:

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• Gas adjusted EBITDA decreased by $266 million, or 33 per cent, compared to 2023, primarily due to lower power prices in the Alberta market and resulting increase in economic dispatch, an increase in the price of carbon, higher carbon costs and fuel usage related to production and lower capacity payments, partially offset by a higher volume of favourable hedging positions settled, the utilization of emission credits to settle a portion of our 2023 GHG obligation and lower natural gas prices;
• Hydro adjusted EBITDA decreased by $143 million, or 31 per cent, compared to 2023, primarily due to lower spot power prices and ancillary services prices in the Alberta market, partially offset by realized premiums above the spot power prices, higher environmental and tax attributes revenues due to higher sales of emission credits to third parties and intercompany sales to the Gas segment and higher ancillary service volumes due to increased demand by the AESO;
• Energy Transition adjusted EBITDA decreased by $31 million, or 25 per cent, compared to 2023, primarily due to increased economic dispatch driven by lower market prices which negatively impacted merchant production, partially offset by lower fuel and purchased power costs; and
• Corporate adjusted EBITDA decreased by $20 million, or 17 per cent, compared to 2023, primarily due to higher spending to support strategic and growth initiatives; partially offset by
• Wind and Solar adjusted EBITDA increasing by $59 million, or 23 per cent, compared to 2023, primarily due to new sales of production tax credits, the return to service of the Kent Hills wind facilities, the commercial operation of the White Rock and Horizon Hill wind facilities, partially offset by lower realized power pricing in the Alberta market and higher OM&A due to the addition of new wind facilities; and
• Energy Marketing adjusted EBITDA increasing by $22 million, or 20 per cent, compared to 2023, primarily due to favourable market volatility and timing of realized settled trades during the current year in comparison to the prior year and lower OM&A.

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Cash flow from operating activities totalled $796 million for the year ended Dec. 31, 2024, compared to $1,464 million in the same period in 2023, a decrease of $668 million, or 46 per cent, primarily due to:

• Lower gross margin due to lower revenues, excluding the effect of unrealized losses from risk management activities, partially offset by lower fuel and purchased power;
• Higher OM&A due to increased spending on planning and design of an ERP system upgrade, higher spending on strategic and growth initiatives, penalties assessed by the Alberta Market Surveillance Administrator for self-reported contraventions and Heartland acquisition-related transaction and restructuring costs;
• Higher current income tax expense due to the full utilization of Canadian non-capital loss carryforwards in 2023, which was partially offset by lower earnings before income tax in 2024;
• Unfavourable change in non-cash operating working capital balances due to lower accounts payables and accrued liabilities, partially offset by lower collateral provided as a result of market price volatility;
• Higher interest expense on debt primarily due to lower capitalized interest resulting from lower construction activity in 2024 compared to 2023; and
• Lower interest income due to lower cash balances and lower interest rates.

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FCF totalled $569 million for the year ended Dec. 31, 2024, compared to $890 million for the same period in 2023, a decrease of $321 million, or 36 per cent, primarily driven by:

• The adjusted EBITDA items noted above;
• Higher current income tax expense due to the full utilization of Canadian non-capital loss carryforwards in 2023, partially offset by lower earnings before income taxes in 2024; and
• Higher net interest expense due to lower capitalized interest resulting from lower construction activity in 2024 compared to 2023, and lower interest income due to lower cash balances and interest rates in 2024 compared to prior year; partially offset by
• Lower distributions paid to subsidiaries’ non-controlling interests relating to lower TA Cogen net earnings resulting from lower merchant pricing in the Alberta market and the cessation of distributions to TransAlta Renewables non-controlling interest;
• Lower sustaining capital expenditures due to the receipt of a lease incentive related to the Company’s head office and lower planned major maintenance at our Alberta and Western Australian gas facilities, partially offset by higher major maintenance at our Alberta Hydro assets; and
• Higher provisions accrued in the current year compared to the prior year resulting in higher FCF.

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Earnings before income taxes totalled $319 million for the year ended Dec. 31, 2024, compared to $880 million in the same period in 2023, a decrease of $561 million, or 64 per cent.

Net earnings attributable to common shareholders totalled $177 million for the year ended Dec. 31, 2024, compared to $644 million in the same period in 2023, a decrease of $467 million, or 73 per cent, primarily due to:

• The adjusted EBITDA items discussed above;
• Higher asset impairment charges due to an increase in decommissioning and restoration provisions on retired assets, driven by a decrease in discount rates and revisions in estimated decommissioning costs and higher impairment charges related to development projects that are no longer proceeding;
• Lower unrealized mark-to-market gains and lower realized gains on closed exchange positions in the Energy Marketing segment mainly driven by market volatility across North American power and natural gas markets;
• Higher unrealized mark-to-market losses recorded in the Wind and Solar segment primarily related to the long-term wind energy sales at the Oklahoma facilities;
• Higher interest expense due to lower capitalized interest during 2024 resulting from lower construction activity in 2024 compared to 2023;
• Lower capacity payments in 2024 for Southern Cross Energy in Western Australia due to the scheduled conclusion on Dec. 31, 2023 of the demand capacity charge under the customer contract, partially offset by the commencement in March 2024 of capacity payments for the Mount Keith 132kV expansion;
• Heartland acquisition-related transaction and restructuring costs;
• Lower interest income due to lower cash balances and lower interest rates during 2024;
• Higher spending in connection with planning and design work on a planned upgrade to the ERP system;
• Lower income tax expense due to lower earnings; and
• Penalties assessed by the Alberta Market Surveillance Administrator for self-reported contraventions pertaining to Hydro ancillary services provided during 2021 and 2022; partially offset by
• Lower depreciation and amortization compared to 2023 related to revisions of useful lives of certain facilities in prior and current periods, partially offset by the commercial operation of new facilities during the year and the return to service of the Kent Hills wind facilities;
• Higher unrealized mark-to-market gains recorded in the Energy Transition segment primarily related to favourable changes in forward prices;
• A recovery related to the reversal of previously derecognized Canadian deferred tax assets; and
• Higher net other operating income mainly due to Sundance A decommissioning cost reimbursement.

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Fourth Quarter Financial Results Summary

Fourth quarter 2024 results were in-line with management’s expectations due to active management of the Company’s merchant portfolio and hedging strategies, despite lower power prices in the Alberta and mid-Columbia markets. The Company settled a higher volume of hedges that were significantly above average spot prices during the period. The acquisition of Heartland on Dec. 4, 2024 positively contributed to production in the Gas segment and further diversifies TransAlta’s competitive portfolio in the highly dynamic and shifting electricity landscape in Alberta by adding 1.7 GW to gross installed capacity.

Availability for the three months ended Dec. 31, 2024, was 87.8 per cent, compared to 86.9 per cent for the same period in 2023, an increase of 0.9 percentage points, primarily due to:

• The addition of the White Rock and Horizon Hill wind facilities which operated with high availability;
• The return to service of the Kent Hills wind facilities;
• Higher availability in the Hydro segment due to lower planned outages;
• Higher availability in the Energy Transition segment due to lower unplanned outages; and
• Positive contribution from the addition of the gas facilities acquired with Heartland; partially offset by
• Lower availability for the Gas segment due to planned outages at Sarnia, Sheerness and Keephills.

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Production for the three months ended Dec. 31, 2024, was 6,199 GWh, compared to 5,783 GWh for the same period in 2023. The increase of 416 GWh, or seven per cent, was primarily due to:

• Higher production in the Wind and Solar segment due to the addition of the Horizon Hill and White Rock West and East wind facilities during 2024;
• Higher production in the Hydro segment compared to the same period in 2023 due to water conservation in the fourth quarter of 2023 that resulted in lower production volumes compared to the current period; partially offset by
• Lower production in the Energy Transition segment due to higher dispatch optimization, which negatively affected merchant production; and
• Lower production in the Gas segment driven by lower availability at the Sarnia facility due to planned outages, higher economic dispatch in Alberta and lower production from Western Australia due to lower demand, partially offset by positive contribution from the Heartland gas facilities.

Adjusted EBITDA for the three months ended Dec. 31, 2024, was $285 million, compared to $289 million in the same period of 2023, a decrease of $4 million, or one per cent. The major factors impacting adjusted EBITDA are summarized below:

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• Gas adjusted EBITDA decreased by $25 million, or 18 per cent, due to lower realized power prices in Alberta, an increase in the carbon price in Canada and higher OM&A driven by higher maintenance costs at the South Hedland facility, partially offset by a higher volume of favourable hedging positions settled, positive contribution from the Heartland gas facilities and lower capacity payments;
• Corporate adjusted EBITDA decreased by $8 million, or 27 per cent, due to higher spending to support strategic and growth initiatives; partially offset by
• Wind and Solar adjusted EBITDA increasing by $13 million, or 16 per cent, due to environmental and tax attributes revenues from the sale of PTCs from the White Rock and Horizon Hill wind facilities to taxable US counterparties, higher revenues driven by increased production from the addition of the White Rock and Horizon Hill wind facilities and the return to service of the Kent Hills wind facilities, partially offset by unfavourable merchant power prices in Alberta;
• Energy Marketing adjusted EBITDA increasing by $13 million, or 93 per cent, due to favourable market volatility and the timing of realized settled trades during 2024 in comparison to the same period in 2023;
• Energy Transition adjusted EBITDA increasing by $2 million, or eight per cent, compared to 2023, primarily due to lower fuel and purchased power costs, partially offset by increased economic dispatch due to lower market prices; and
• Hydro adjusted EBITDA increasing by $1 million, or two per cent, due to higher merchant revenues driven by higher volumes, partially offset by lower spot power prices and lower environmental and tax attributes revenues.

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FCF totalled $48 million for the three months ended Dec. 31, 2024, compared to $121 million in the same period in 2023, a decrease of $73 million, or 60 per cent, primarily due to:

• The adjusted EBITDA items noted above;
• Higher realized foreign exchange losses compared to realized foreign exchange gains in the comparative period;
• Higher current income tax expense due to the full utilization of Canadian non-capital loss carryforwards in 2023, partially offset by a higher loss before income taxes in the current period compared to the same period in 2023;
• Higher net interest expense due to lower capitalized interest as a result of capital projects being completed in the first half of 2024 and lower interest income due to lower cash balances in 2024; and
• Higher dividends paid on preferred shares; partially offset by
• Lower distributions paid to subsidiaries’ non-controlling interests due to lower TA Cogen net earnings;
• Lower sustaining capital due to lower planned maintenance at the Alberta gas facilities, partially offset by higher planned maintenance at the Sarnia cogeneration facility and Alberta hydro facilities; and
• Higher provisions accrued in the current year compared to the prior year resulting in higher FCF.

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Net loss attributable to common shareholders for the three months ended Dec. 31, 2024, was $65 million, compared to a net loss of $84 million in the same period of 2023, an improvement of $19 million, or 23 per cent, primarily due to:

• The adjusted EBITDA items discussed above;
• Higher interest expense due to lower capitalized interest in the fourth quarter of 2024 resulting from lower capital activity compared to the same period in 2023;
• Heartland acquisition-related transaction and restructuring costs in the fourth quarter of 2024;
• Higher ERP upgrade costs related to planning and design work;
• Penalties assessed by the Alberta Market Surveillance Administrator for self-reported contraventions pertaining to Hydro ancillary services provided during 2021 and 2022;
• Higher depreciation and amortization due to the commercial operation of the White Rock and Horizon Hill wind facilities during 2024; and
• Higher taxes other than income taxes, mainly consisting of property taxes due to the addition of new wind facilities during 2024; partially offset by
• Higher realized and unrealized foreign exchange gains;
• Lower realized gains on closed exchange positions in 2024 compared to the same period in 2023;
• An income tax recovery relative to the prior period expense as a result of a higher loss before income taxes due to the above noted items; in addition to lower non-deductible expenses;
• Lower net earnings attributable to non-controlling interest compared to the same period in 2023 due to lower merchant pricing in the Alberta market;
• Higher net other operating income mainly due to Sundance A decommissioning cost reimbursement; and
• Lower asset impairment charges related to the decommissioning and restoration provisions on retired assets driven by lower discount rates in the current period compared to the same period in 2023, partially offset by impairment charges related to development projects that are no longer proceeding.

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Alberta Electricity Portfolio

For the three months and year ended Dec. 31, 2024, the Alberta electricity portfolio generated 3,150 GWh and 11,809 GWh, respectively, compared to 2,989 GWh and 11,759 GWh, respectively, in the same periods in 2023. The annual production increase of 50 GWh, or 0.4 per cent, was primarily due to:

• Higher production in the Gas segment due to the addition of gas facilities from the acquisition of Heartland; and
• A full-year of production from the addition of the Garden Plain wind facility, which was commissioned in August 2023; partially offset by
• Higher dispatch optimization in the Gas segment; and
• Lower production from the Alberta hydro facilities due to lower water resources compared to the prior year.

The fourth quarter production increase of 161 GWh, or five per cent, benefited from:

• Higher production from the Gas segment due to the Heartland acquisition; and
• Higher production from the Alberta hydro facilities due to significant water conservation during the fourth quarter of 2023; partially offset by
• Higher economic dispatch for the Alberta gas facilities; and
• Lower production in the Wind and Solar segment due to lower wind resource.

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Gross margin for the Alberta portfolio for the three months and year ended Dec. 31, 2024, was $191 million and $856 million, respectively, a decrease of $24 million and $392 million, respectively, compared to the same periods in 2023. The annual decrease was primarily due to:

• The impact of lower Alberta spot power prices and lower hydro ancillary services prices;
• Increased dispatch optimization in the Gas segment driven by lower power prices; and
• An increase in the carbon price per tonne from $65 in 2023 to $80 in 2024; partially offset by
• Higher gains realized on financial hedges settled in the period;
• Higher environmental and tax attributes revenues due to the increased sales of emission credits to third parties and intercompany sales from the Hydro segment to the Gas segment;
• The utilization of emission credits in the Gas segment in 2024 to settle a portion of our 2023 GHG obligation;
• Higher hydro ancillary services volumes due to increased demand by the AESO; and
• Lower natural gas prices.

Gross margin for the three months ended Dec. 31, 2024 was impacted by:

• Lower Alberta spot power prices;
• Higher carbon compliance costs due to increase in the carbon price from $65 per tonne in 2023 to $80 per tonne in 2024; and
• Higher purchased power due to the contractual requirement to fulfill physical power trades; partially offset by
• Higher gains realized on financial hedges settled in the period.

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Alberta power prices for 2024 were lower compared to 2023. The average spot power price per MWh for the three months and year ended Dec. 31, 2024, was $52 and $63, respectively, compared to $82 and $134, respectively, in the same periods in 2023. This was primarily due to:

• Higher generation from the addition of increased supply of new renewables and combined-cycle gas facilities into the market compared to the prior period; and
• Lower natural gas prices.

Hedged volumes for the three months and year ended Dec. 31, 2024, were 2,637 GWh and 9,080 GWh at an average price of $80 per MWh and $84 per MWh, respectively, compared to 1,824 GWh and 7,550 GWh at an average price of $90 per MWh and $110 per MWh, respectively, in 2023.

Liquidity and Financial Position

We maintain adequate available liquidity under our committed credit facilities. As at Dec. 31, 2024, we had access to $1.6 billion in liquidity, including $336 million in cash, which exceeds the funds required for committed growth, sustaining capital and productivity projects.

2025 Outlook and Financial Guidance

For 2025, management expects adjusted EBITDA to be in the range of $1.15 to $1.25 billion and FCF to be in the range of $450 to $550 million, based on the following, relative to 2024:

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• Higher contribution from the wind and solar portfolio due to a full-year impact of new asset additions of the White Rock and Horizon Hill wind facilities;
• Contribution from assets acquired with Heartland;
• Lower contributions from the legacy merchant hydro, wind and gas assets in Alberta which are expected to step down due to lower expected average power prices in Alberta given baseload gas and renewables supply additions in late 2024 and 2025;
• Lower current income tax expense in 2025 compared to 2024 actual; and
• Increased net interest expense in 2025 as a result of the Heartland acquisition and lower interest income earned on lower cash deposits and lower capitalized interest on growth projects.

The following table outlines our expectations regarding key financial targets and related assumptions for 2025 and should be read in conjunction with the narrative discussion that follows and the Governance and Risk Management section of the MD&A for additional information:

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The Company’s outlook for 2025 may be impacted by a number of factors as detailed further below.

Alberta spot price sensitivity: a +/- $1 per MWh change in spot price is expected to have a +/-$3 million impact on adjusted EBITDA for 2025.

Other assumptions relevant to the 2025 outlook

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Conference call

TransAlta will host a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, Feb. 20, 2025, to discuss our fourth quarter and year end 2024 results. The call will begin with comments from John Kousinioris, President and Chief Executive Officer, and Joel Hunter, EVP Finance and Chief Financial Officer, followed by a question-and-answer period.

Fourth Quarter and Full Year 2024 Conference Call

Webcast link: https://edge.media-server.com/mmc/p/zd49obg6 

To access the conference call via telephone, please register ahead of time using the call link here: https://register.vevent.com/register/BI5c12d9a2da0e4e06892f413e217f0350. Once registered, participants will have the option of 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the “Call Me” option to receive an automated call directly to their phone.

Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the replay will be accessible at https://edge.media-server.com/mmc/p/zd49obg6. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.

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Notes

(1)These items (adjusted EBITDA, FCF and annual average EBITDA) are not defined and have no standardized meaning under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings (loss) trends more readily in comparison with prior periods’ results. Please refer to the Non-IFRS Measures section of this earnings release for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.
(2)Funds from operations (FFO) per share and free cash flow (FCF) per share are calculated using the weighted average number of common shares outstanding during the period. Refer to the Additional IFRS Measures and Non-IFRS Measures section of the MD&A for the purpose of these non-‍IFRS ratios.

Non-IFRS financial measures and other specified financial measures

We use a number of financial measures to evaluate our performance and the performance of our business segments, including measures and ratios that are presented on a non-IFRS basis, as described below. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our consolidated financial statements prepared in accordance with IFRS. We believe that these non-IFRS amounts, measures and ratios, read together with our IFRS amounts, provide readers with a better understanding of how management assesses results.

Non-IFRS amounts, measures and ratios do not have standardized meanings under IFRS. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, as an alternative to, or more meaningful than, our IFRS results.

Adjusted EBITDA

Each business segment assumes responsibility for its operating results measured by adjusted EBITDA. Adjusted EBITDA is an important metric for management that represents our core operational results. Interest, taxes, depreciation and amortization are not included, as differences in accounting treatments may distort our core business results. In addition, certain reclassifications and adjustments are made to better assess results, excluding those items that may not be reflective of ongoing business performance. This presentation may facilitate the readers’ analysis of trends.

Average Annual EBITDA

Average annual EBITDA is a forward-looking non-IFRS financial measure that is used to show the average annual EBITDA that the project is expected to generate.

Funds From Operations (FFO)

FFO is an important metric as it provides a proxy for cash generated from operating activities before changes in working capital and provides the ability to evaluate cash flow trends in comparison with results from prior periods. FFO is a non-IFRS measure. The most directly comparable IFRS measure is Cash Flow from Operations.

Free Cash Flow (FCF)

FCF is an important metric as it represents the amount of cash that is available to invest in growth initiatives, make scheduled principal repayments on debt, repay maturing debt, pay common share dividends or repurchase common shares. Changes in working capital are excluded so FFO and FCF are not distorted by changes that we consider temporary in nature, reflecting, among other things, the impact of seasonal factors and timing of receipts and payments. FCF is a non-IFRS measure. The most directly comparable IFRS measure is Cash Flow from Operations.

Non-IFRS Ratios

FFO per share, FCF per share and adjusted net debt to adjusted EBITDA are non-IFRS ratios that are presented in the MD&A. Refer to the Reconciliation of Cash Flow from Operations to FFO and FCF and Key Non-IFRS Financial Ratios sections of the MD&A for additional information.

FFO per share and FCF per share

FFO per share and FCF per share are calculated using the weighted average number of common shares outstanding during the period. FFO per share and FCF per share are non-IFRS ratios.

Reconciliation of these non-IFRS financial measures to the most comparable IFRS measure are provided below.

Reconciliation of Non-IFRS Measures on a Consolidated Basis

The following table reflects adjusted EBITDA by segment and provides reconciliation to earnings before income taxes for the three months ended Dec. 31, 2024:

(1)  The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment.
(2)  Adjusted EBITDA is not defined and has no standardized meaning under IFRS. Refer to the Non-IFRS financial measures and other specified financial measures section in this earnings release and may not be comparable to similar measures presented by other issuers.

The following table reflects adjusted EBITDA by segment and provides reconciliation to loss before income taxes for the three months ended Dec. 31, 2023:

(1)  The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment.
(2)  Adjusted EBITDA is not defined and has no standardized meaning under IFRS. Refer to the Non-IFRS financial measures and other specified financial measures section in this earnings release and may not be comparable to similar measures presented by other issuers.

The following table reflects adjusted EBITDA by segment and provides reconciliation to earnings before income taxes for the year ended Dec. 31, 2024:

(1)  The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment.
(2)  Adjusted EBITDA is not defined and has no standardized meaning under IFRS. Refer to the Non-IFRS financial measures and other specified financial measures section in this earnings release and may not be comparable to similar measures presented by other issuers.

The following table reflects adjusted EBITDA by segment and provides reconciliation to earnings before income taxes for the year ended Dec. 31, 2023:

(1)  The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment.
(2)  Adjusted EBITDA is not defined and has no standardized meaning under IFRS. Refer to the Non-IFRS financial measures and other specified financial measures section in this earnings release and may not be comparable to similar measures presented by other issuers.

Reconciliation of cash flow from operations to FFO and FCF

The table below reconciles our cash flow from operating activities to our FFO and FCF:

(1)  Includes our share of amounts for the Skookumchuck wind facility, an equity-accounted joint venture.
(2)  2023 includes amounts related to onerous contracts recognized in 2021 and a voluntary contribution to the US Defined Benefit Pension Plan for the Centralia thermal facility.
(3)  Other consists of production tax credits, which is a reduction to tax equity debt, less distributions from an equity-accounted joint venture.
(4)  These items are not defined and have no standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. Refer to the Non-IFRS Measures section in this earnings release .

The table below provides a reconciliation of our adjusted EBITDA to our FFO and FCF:

(1)  Adjusted EBITDA is defined in the Additional IFRS Measures and Non-IFRS Measures of this earnings release and reconciled to earnings (loss) before income taxes above.
(2) Net interest expense includes interest expense less interest income and excludes non-cash items like financing amortization and accretion.
(3)  These items are not defined and have no standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. FFO and FCF are defined in the Non-IFRS financial measures and other specified financial measures section of in this earnings release and reconciled to cash flow from operating activities above.
(4)  Includes our share of amounts for Skookumchuck wind facility, an equity-accounted joint venture.

TransAlta is in the process of filing its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the associated Management’s Discussion & Analysis (MD&A). These documents will be available today on the Investors section of TransAlta’s website at www.transalta.com or through SEDAR at www.sedarplus.ca.

TransAlta will also be filing its Form 40-F with the US Securities and Exchange Commission. The form will be available through their website at www.sec.gov. Paper copies of all documents are available to shareholders free of charge upon request.

About TransAlta Corporation:

TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Western Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 70 per cent reduction in GHG emissions or 22.7 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit our web site at transalta.com.

Cautionary Statement Regarding Forward-Looking Information

This news release includes “forward-looking information,” within the meaning of applicable Canadian securities laws, and “forward-looking statements,” within the meaning of applicable United States securities laws, including the Private Securities Litigation Reform Act
of 1995 (collectively referred to herein as “forward-looking statements”). Forward-looking statements are not facts, but only predictions and generally can be identified by the use of statements that include phrases such as “may”, “will”, “can”, “could”, “would”, “shall”, “believe”, “expect”, “estimate”, “anticipate”, “intend”, “plan”, “forecast”, “foresee”, “potential”, “enable”, “continue” or other comparable terminology. These statements are not guarantees of our future performance, events or results and are subject to risks, uncertainties and other important factors that could cause our actual performance, events or results to be materially different from those set out in or implied by the forward-looking statements. In particular, this news release contains forward-looking statements about the following, among other things: the strategic objectives of the Company and that the execution of the Company’s strategy will realize value for shareholders; our capital allocation and financing strategy; our sustainability goals and targets, including those in our 2024 Sustainability Report; our 2025 Outlook; our financial and operational performance, including our hedge position; optimizing and diversifying our existing assets; the increasingly contracted nature of our fleet; expectations about strategies for growth and expansion, including opportunities for Centralia redevelopment, and data centre opportunities; expected costs and schedules for planned projects; expected regulatory processes and outcomes, including in relation to the Alberta restructured energy market; the power generation industry and the supply and demand of electricity; the cyclicality of our business; expected outcomes with respect to legal proceedings; the expected impact of future tax and accounting changes; and expected industry, market and economic conditions.

The forward-looking statements contained in this news release are based on many assumptions including, but not limited to, the following: no significant changes to applicable laws and regulations; no unexpected delays in obtaining required regulatory approvals; no material adverse impacts to investment and credit markets; no significant changes to power price and hedging assumptions; no significant changes to gas commodity price assumptions and transport costs; no significant changes to interest rates; no significant changes to the demand and growth of renewables generation; no significant changes to the integrity and reliability of our facilities; no significant changes to the Company’s debt and credit ratings; no unforeseen changes to economic and market conditions; and no significant event occurring outside the ordinary course of business.

These assumptions are based on information currently available to TransAlta, including information obtained from third-party sources. Actual results may differ materially from those predicted. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this news release include, but are not limited to: fluctuations in power prices; changes in supply and demand for electricity; our ability to contract our electricity generation for prices that will provide expected returns; our ability to replace contracts as they expire; risks associated with development projects and acquisitions; any difficulty raising needed capital in the future on reasonable terms or at all; our ability to achieve our targets relating to ESG; long-term commitments on gas transportation capacity that may not be fully utilized over time; changes to the legislative, regulatory and political environments; environmental requirements and changes in, or liabilities under, these requirements; operational risks involving our facilities, including unplanned outages and equipment failure; disruptions in the transmission and distribution of electricity; reductions in production; impairments and/or writedowns of assets; adverse impacts on our information technology systems and our internal control systems, including increased cybersecurity threats; commodity risk management and energy trading risks; reduced labour availability and ability to continue to staff our operations and facilities; disruptions to our supply chains; climate-change related risks; reductions to our generating units’ relative efficiency or capacity factors; general economic risks, including deterioration of equity and debt markets, increasing interest rates or rising inflation; general domestic and international economic and political developments, including potential trade tariffs; industry risk and competition; counterparty credit risk; inadequacy or unavailability of insurance coverage; increases in the Company’s income taxes and any risk of reassessments; legal, regulatory and contractual disputes and proceedings involving the Company; reliance on key personnel; and labour relations matters.

The foregoing risk factors, among others, are described in further detail under the heading “Governance and Risk Management” in the MD&A, which section is incorporated by reference herein.

Readers are urged to consider these factors carefully when evaluating the forward-looking statements and are cautioned not to place undue reliance on them. The forward-looking statements included in this news release are made only as of the date hereof and we do not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise, except as required by applicable laws. The purpose of the financial outlooks contained herein is to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes.

Note: All financial figures are in Canadian dollars unless otherwise indicated.

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